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The S&P 500 Index ($SPX) is up +0.16% and has reached a new record high along with the Nasdaq 100 Index ($IUXX), which is up +0.09%. The Dow Jones Industrial Index ($DOWI) is also up +0.55%. September E-mini S&P futures are up +0.13%, while September E-mini Nasdaq futures are down -0.03%. US stocks are supported by expectations of interest rate cuts, with Treasury Secretary Scott Bessent suggesting rates should be 150-175 basis points lower, and indicating a likelihood of a 50 basis point cut in September. The 10-year T-note yield fell by 6 basis points to 4.227% today.
Market analysts have raised the odds for a -25 basis point rate cut in September to 100%, with a slight 1% chance of a -50 basis point cut following recent CPI reports and slowed labor market indicators. The federal funds rate is currently targeted between 4.25%-4.50%, with an effective rate at 4.33%. Expectations are for an overall -64 basis point rate cut by the end of the year, decreasing to 2.97% by 2026.
In corporate news, Amazon (AMZN) shares are up more than +1% after announcing an expansion of its same-day grocery delivery service. Chip stocks also rallied due to positive sentiment on interest rate cuts, with several companies showing gains above +3%. Meanwhile, Hanesbrands (HBI) shares rose over +5% following the announcement of a $2.2 billion acquisition by Gildan Activewear (GIL), which itself saw an +11% increase.
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